SCHRODERS has forecast generally stronger world economies this year and a rise in United States interest rates of between 0.25 and 0.5 per cent.
'I think that is a fairly consensus view, that there will be more upward than downward pressure on rates this year,' Richard Haw, managing director of Schroder Investment Management (Hong Kong), said.
He predicted Hong Kong, which is Schroders' favourite Asian market and accounts for 56 per cent of its flagship US$300 million Schroder Asian Fund, would trade between 12,000 and 15,000 points on the Hang Seng Index this year.
'We think it is more likely to hit 15,000 before 12,000 but that is the sort of range we can expect this year.' The main threat to the Hong Kong market was the possibility of higher interest rates imported from the US because of the Hong Kong-US dollar peg.
'At the moment, the other hot topic is whether there is going to be any action on property speculation but it looks to us like the authorities are trying to talk that one down.' He said it was unlikely the Government could undertake any far-reaching change to the property or taxation scene so close to the handover.
Elsewhere in Asia, Schroders sees reasonably attractive valuations in markets other than Hong Kong and Japan.
'Our view is the slowdown in exports from Asia is cyclical rather than secular and caused by the slowdown in the US technology sector around the middle of last year.' Schroders also likes the future prospects of the Thai market, which fell by 37.5 per cent in the year to January 10 and accounts for 3 per cent of the Asian Fund and 18 per cent of its Asian Emerging Markets Fund.
